BY - JAHNAVI SINGH
AMITY LAW SCHOOL, NOIDA
Tax plays a very important role in everyone’s life. Once the person start earning he is liable to pay tax to the government. A question arises that what do you mean by tax? Taxation is a compulsory payment made to the government because government provides defenses, administration, infrastructure, health etc. Tax paying helps government to contribute for the wealth of the nation, to protect new industries, to protect local producers and many more. There are exception to the entities where entities are exempted from taxation and they are Religious institutions, Charitable Institution, Non- profit Not-stock educational institutions, Government institution Foreign Diplomats. A Person who pay the tax is known as Assess. Taxation also include slab rates. Slab rate is the tax structure where income has been categorized into different groups and is the criteria for grouping is the amount of income. Each such group is known as Tax slab.
Tax is being charged at different rates on a range of income falling under different tax slab The slab rate for different income are as follows:
With regard to this person tries to avoid tax by minimizing their income and in legal term it is known as Tax evasion. Tax evasion refers to a situation where a person tries to reduce his tax liability by deliberating suppressing the income or by inflecting the expenditure showing income lower than actual income and re sorting to various types of deliberate manipulations. It involves stating an untrue statement knowingly submitting misleading clause, sepration of facts, not maintaining proper amount of income earned. An Assesse who dishonestly claim under the statue by making false statement would be guilty of tax evasion.
Principle Of Taxation
1.The Benefit Principle : This principle holds the individual should be taxed in proportion to the benefits they receive from the governments and that taxes should be paid by those people who receive the direct benefit of the government programs and projects out of the tax paid.
2.The ability to pay principle: This principle holds that taxes should relate with peoples income or the ability to pay that is people with greater income or wealth and can afford to pay more taxes should be taxed at higher rate then people with less wealth.
3.The equal distribution principle: This principle says that income, wealth and transaction should be taxed at a fixed percentage i.e people who earn more and buy more should pay more taxes, but will not pay higher rate of taxes.
How can Tax corruption be reduced in India
In the previous years we have heard about issue of corruption in the country and the government is basically trying to think of various ways to manage it efficiently. The best way to reduce tax corruption in india is the introduction of Goods and Services Tax (GST). GST have broden the taxation base of the nation and have also increase the collection of taxes.
People are used to of exploitation because of Low Pay scales/ Wages, less job opportunities, lack of strict and fast punishments, lack of unity in public; and therefore politicians who know the miserable condition of common citizens, who know their weaknesses, they utilize such situations as opportunity by doing all kind of nonsense for their petty individual gains, may it be subsidy politics, religion and caste based politics and all bad they can think off to help and we can let them do.
As per the tax mangers, GST can be helpful to control the black money in India. This is basically indirect tax reformation , and many tax filers do not give report for all transaction, they disclose less however earn more and hiding actual figures from books help them to pay low taxes. Actually they want to keep away from VAT, excise and many other taxes. Here the tax department will keep an eye on everything so the taxpayer wont get chance to do any illegal activities. The application of Aaadhar will also become more prominent as this is essential for filing GST. It’ll be easy for tax unit to record transactions.
Impact of GST on Different Sector
In todays world GST is playing a vital role and it has certain implications on all sectors. If we talk about real estate sector it will not only affect the buyers but it will also affect the sellers. The purchase of property is one of the biggest financial decision taken by a person the GST may not touch the price of residence very high. As per the future thought this sector is certainly going to change in positive note.
Now if we talk about the sale of alcohol there are still some controversies which are being taken place. It has been presumed that in the upcoming year there will be another way of restraining money in this department. Thus, alcohol sector have possibility of staying away from GST.
One India One Tax is a myth
It is basically said that GST is one tax in india. GST came into existence on replacement of different indirect tax. Custom duty will remain continue to levy. All the direct taxes, like income tax, gift tax will remain the same as before.
In previous time there were no other equipment which can be use to end the tax corruption but introduction of GST in India was one of the best decision taken by the government themselves. The structure of GST is not perfect but yes it can make India a better country with regard to its economy favorable for foreign investment. The most important thing with regard to GST is that if any person is doing any kind of business then he should get registered for GST as it is not nly going to help Indian government but it will also help the person to track their business weekly because in GST a person have to make their business activity weekly. At last it would be concluded by saying that India is a developing country and GST is playing a vital role. In future GST can bring a big difference with regard to reducing tax corruption in india.